Despite struggles, board has taken no decisive action to try to promote change

Reportedly, Canada's Research in Motion, Ltd. (TSE:RIM)'s co-CEOs/Chairman have ensorcelled their company's board members to the point where they've become almost unable to speak up against the pair. As a result the board has remained silent and submissive, even as RIM has seen its financial fortunes slide perilously in the wrong direction.

I. A Need For Change

The Wall Street Journal, though, is reporting that some of the company's biggest investors have quietly joined calls for the board of directors to take drastic action -- either to sell the company or to wipe the management slate clean.

So far the noisiest public complaints had come from Jaguar Financial Corp., a Toronto merchant bank who invested in RIM in hopes of forcing either a sale or a turnaround via a change in management.

Over the course of the last several months, RIM's efforts have unfolded like a train wreck:

Oct. 21
News arrives that RIM has been sued for scooping the name from an American software company's trademarked and active product.

Nov. 25
At the debut of the BlackBerry Bold 9790, RIM's employees offer a 50 percent discount to the first 1,000 customers in Jakarta, Indonesia, provoking a riot. Many are injured and RIM employees are arrested.

Nov. 28Inebriated RIM employees, representing their company on business, start a physical fight with flight attendants, forcing the flight to be diverted to Vancouver, off its course to Beijing. RIM apologies and fires the pair.

Dec. 23
Canada's The Globe and Mail reports that RIM is preparing for a Jan. 11 hearing over whether it stole the trademarked acronym BBM from a Canadian broadcast advocacy who used the term for six decades.

RIM's stock has plummeted in price since the start of 2011. [Image Source: Google Finance]

About the lone positive news over this period has been the minor pickup in the company's stock on Dec. 21, which came thanks to reports that multiple companies were investigating a RIM acquisition.

II. RIM's Management Has Tightly Controlled Company, Board

Currently RIM has a very unusual executive management structure, which some blame for its problems. Company co-founders Jim Balsillie and Mike Lazaridis share the CEO and Chairman position, refusing to allow fresh blood to step in. Of the pair, Mr. Balsillie tends to focus on finances, while Mr. Lazaridis focuses on engineering.

In June RIM agreed to review its management structure, but there's been no action from the company's board thus far. A final analysis, reportedly, may arrive next month, potentially prompting some sort of action.

Investors are focusing their efforts on RIM's contingent of independent directors. These members mostly arrived in the wake of a 2007 stock backdating scandal, which led to fines and penalties from the Ontario Securities Commission and the U.S. Securities and Exchange Commission. At the time the fresh blood forced company co-founder Jim Balsillie to step down from the role of Chairman, hoping to subsequently push co-founder Mike Lazaridis out of the CEO spot. Instead, after a year Jim Balsillie was back as a chairman and Mr. Lazaridis and Balsillie's unusual joint CEO/chairman scheme was restored.

Leading the coalition of independent directors is Barbara Stymest, former Toronto Stock Exchange CEO and executive at the Royal Bank of Canada (TSE:RY), the nation's top lender. Another prominent director is Roger Martin dean of the University of Toronto's and author of a popular book on how directors should take lessons from the NFL, acting in a greater corporate activist capacity.

Mr. Martin wrote in his book, "[Board members] can choose to accept a check-the-box meeting, or they can rise above it and focus on doing their important public-service job: helping their company to perform well."

Ironically both Mr. Martin and Ms. Stymest appear to have given RIM's struggling leadership a check-the-box sort of approval. Reportedly, Mr. Balsillie's control over the board is particularly powerful and he has blocked other top-level executives from getting access to the board, in an effort to consolidate his and Mr. Lazardis' power.

But how long the pair will remain silent and submissive remains to be seen considering that the negativity surrounding RIM is starting to rub off on their reputations. The WSJ quotes an executive at one of RIM’s top investors, "It would seem to be a joke to have two people on the board who claim to be experts in corporate governance."

Not wanting to get into another back and forth debate, just curious...

At what point do you admit you were wrong and RIM is in deep sheep dip? RIM was in bad shape in Sept. when you were (in my opinion) in denial about how bad things were getting. Now Jason put up a timeline above for the past 3 months... Not a single bit of it is untrue. It all happened. What was left out is the potential takeover that happened last week. It didnt succeed, but its only a matter of time on that. With their only hope delayed until Q4 of next year, its not going to be easy. They do have $$$, but they also have investors that dont want to lose that $$$.

How much longer can you hold out? Even RIM says sales are declining and expected to decline further in the next few quarters. Think about it... By the time QNX is released in a phone in Q4 12 (if it isnt further delayed) how far along will IOS and Android be? What exactly will it take for you to admit that RIM is in deep trouble? Will it be a hostile outing of the CEO's (I expect that in Q2 or 3). Will it be a larger sales drop than the current one? What will it take?

How can I admit I was wrong when, in fact, I never said anything like "RIM will prevail no matter what"?

The only thing I said is that JM and yourself and cheesy and a few others have an agenda, and this is why you ignore the positive facts and only post the negative facts here.

That's what I said, and I will keep reading both positive and negative news about RIM, while you biased paid trolls can continue carefully selecting whatever you post here, sifting through all the RIM related news, filtering out all the positive stuff, watching like a hawk that not a single positive piece of news like Thailand BB riots gets posted here. Good job google-o-trolls. Time to cash your google checks or something

"How can I admit I was wrong when, in fact, I never said anything like "RIM will prevail no matter what"?"

Please, dont mince words. You have been aggressively defending everything RIM does and denying anything negative posted for months. I have personally laid out details to you showing the decline and you refuse to see it. Its not that I am anti RIM, I just see them fluttering and cant help but laugh at the total ineptitude. TO be honest, the whole thing started for me, when I saw you posting about how great RIM was really doing in spite of the news, and I tried to show you all the bad info, becasue I honestly thought you werent aware of it... Then I quickly found out you were in denial, not unaware. Either that or you just like to argue.

It doesnt, we are both putting in our opinions. Do I accuse you of being on RIM's payroll? No, I do not. I think your nuttier than a jar of peanut butter and in severe denial. I really dont see what you see in RIM's products, but I dont automatically assume you are on thier payroll for having an opinion.

RIM is in an unfortunate position. They produce excellent devices however BB users aren't finicky as are other users. Many including myself love our phones and keep them for quite a while. This hurts the company as a publicly traded company where double digit growth is expected in higher margin areas such as device sales. I should add that in 5 years I've had 2 BBs. My current 8900 (on BB OS 5 upgraded from 4) I've had for over 2 years and as long as it keeps going I don't plan on changing it before Q4 2012.

I should add that I use my phone for work not for pleasure. For pleasure I go to the beach, dive, snorkel or play Call of Duty. My "old" phone does everything I need and does it well.

One last thing, RIM has year on year grown their user base. I believe it was said in 2011 it grew by 35%. This is worldwide. In many countries outside the US the phone is popular but as I stated above users keep their beloved BBs for years.

Who cares how many users BB has or how many new users they keep recruiting, once JM and retro said RIM is doomed - RIM is doomed, man. Amount of users or profitability or the other facts don't matter here, it's what JM and retro say. THEY pretend to be the reality here, so don't bother them with any facts about BB users, growing BB service subscription and other positive facts about RIM like these. You'll learn with time what DT is, you'll understand. A lot of people are fanboys here, bought out by companies like Google and Apple, a lot do professional anti-RIM trolling, and people like Swash also selectively find pro-Apple posts on the net and link them here. Almost no objective people without prejudices on DT.